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Loan Agreement Template
A loan agreement records the terms on which one party lends money to another — including the amount, interest, repayment schedule, default provisions, and any security. Use our free Australian template to document a loan between family members, friends, or businesses in a way that is clear, enforceable, and sensitive to the National Consumer Credit Protection Act 2009 (Cth) where it applies.
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LOAN AGREEMENT
Commercial Loan · New South Wales, Australia
LENDER
Robert C. Patterson
12 Harbourside Drive, Sydney NSW 2000
+61 2 9876 5432
r.patterson@email.com.au
+61 2 9876 5432
r.patterson@email.com.au
BORROWER
Michael T. Chen
88 Chapel Street, Melbourne VIC 3000
+61 412 345 678
m.chen@email.com.au
+61 412 345 678
m.chen@email.com.au
Principal: 25000 AUD
5.5% p.a. Simple · Secured · Commercial
This Loan Agreement ("Agreement") is entered into as of 1 May 2026 between Robert C. Patterson (the "Lender") and Michael T. Chen (the "Borrower"). This is a commercial loan entered into for business purposes. It is not subject to the National Consumer Credit Protection Act 2009 (Cth); rights and obligations are governed by the common law of contract and the laws of New South Wales. The Lender agrees to lend and the Borrower agrees to borrow on the terms set out below.
1.
LOAN AMOUNT AND PURPOSE
The Lender shall advance to the Borrower the principal sum of 25,000.00 AUD (the "Loan"). The Borrower shall apply the Loan proceeds solely for the following purpose: Business working capital and equipment purchase. The Borrower must not apply the proceeds to any other purpose without the prior written consent of the Lender.
2.
INTEREST
Interest shall accrue on the outstanding principal balance at the rate of 5.5% per annum, calculated on a simple basis. Interest shall be computed on a 365-day year basis on the actual number of days elapsed.
3.
TERM
This Agreement shall commence on 1 May 2026 and continue until the maturity date of 30 April 2029 (the "Maturity Date"), unless earlier repaid or terminated in accordance with the terms hereof. All outstanding principal and accrued interest shall be due and payable in full on the Maturity Date.
4.
REPAYMENT
The Borrower shall make monthly repayments of 756.00 AUD each, commencing one month after the Loan Date and continuing until the Maturity Date, at which time all remaining principal and accrued interest shall be due and payable in full.
5.
PRIVACY AND PERSONAL INFORMATION
The Lender shall handle the Borrower's personal information (as defined in section 6 of the Privacy Act 1988 (Cth)) in accordance with the Privacy Act, the Privacy Regulations 2025, and the Australian Privacy Principles (APPs) in Schedule 1 to the Privacy Act. The Borrower acknowledges and consents to the Lender collecting, holding, using and disclosing the Borrower's personal information for the purposes of: (a) assessing this loan application and performing this Agreement; (b) collecting outstanding amounts; (c) reporting to credit reporting bodies under Part IIIA of the Privacy Act (consumer credit reporting); (d) exchanging information with any guarantor and the Borrower's professional advisors; and (e) complying with the Lender's legal obligations, including under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) where applicable. The Lender shall comply with the Notifiable Data Breach scheme (Part IIIC of the Privacy Act) in respect of any eligible data breach affecting the Borrower's personal information.
6.
FINANCIAL HARDSHIP
If the Borrower experiences genuine financial hardship that affects their capacity to meet repayments under this Agreement, the Borrower shall notify the Lender in writing as soon as reasonably practicable. While this is a commercial loan not directly governed by the National Credit Code, the parties agree to act in good faith to consider any reasonable hardship request, recognising that mutually agreed deferrals, restructures, or instalment variations are generally preferable to default and enforcement action. Both parties acknowledge that the Australian Financial Complaints Authority (AFCA) is the relevant external dispute-resolution scheme for licensed credit providers.
7.
SECURITY INTEREST
This Loan is secured by the following collateral (the "Collateral"): 2024 Isuzu NPR 75-190 truck, VIN JALEBR74F7N1234567, registered Vic. The Borrower hereby grants the Lender a security interest in the Collateral pursuant to the Personal Property Securities Act 2009 (Cth) ("PPSA"). The Borrower acknowledges that the Lender may register its security interest on the Personal Property Securities Register ("PPSR") operated by the Attorney-General's Department. The Borrower must not sell, transfer, further encumber, or otherwise deal with the Collateral without the prior written consent of the Lender. The Lender may exercise all enforcement rights available under the PPSA upon default. If the Collateral includes land, a mortgage or caveat may be required — separate legal advice should be obtained.
8.
GUARANTEE
Jennifer A. Chen of 88 Chapel Street, Melbourne VIC 3000 (the "Guarantor") unconditionally and irrevocably guarantees to the Lender the due and punctual payment of all moneys owing or to become owing by the Borrower under this Agreement. The Guarantor's liability is co-extensive with and not greater than the Borrower's liability. The Lender may enforce against the Guarantor without first proceeding against the Borrower or the Collateral. The guarantee is a continuing obligation and shall not be discharged by any amendment, waiver, or indulgence granted by the Lender to the Borrower. Under the Banking Code of Practice (where applicable to the Lender) and Australian common-law unconscionability principles (Commercial Bank of Australia v Amadio), guarantors should obtain independent legal advice and, where applicable, separately certified independent financial advice before signing. The Guarantor signs this Agreement having done so or having freely waived that opportunity.
9.
PREPAYMENT
The Borrower may prepay this Loan in whole or in part at any time, without penalty. Any prepayment shall be applied first to accrued and unpaid interest and then to the outstanding principal balance.
10.
DEFAULT AND ACCELERATION
The Borrower shall be in default if: (a) the Borrower fails to make any repayment within 14 days of its due date; (b) the Borrower breaches any other material term of this Agreement and fails to remedy the breach within 14 days of written notice from the Lender; (c) the Borrower becomes insolvent or subject to proceedings under the Bankruptcy Act 1966 (Cth) (individuals) or the Corporations Act 2001 (Cth) (companies); (d) a creditor takes enforcement action against the Borrower's assets; or (e) any representation made by the Borrower is materially false. Upon default, the Lender may declare the entire outstanding balance of principal and accrued interest immediately due and payable (acceleration). Default interest shall accrue on the overdue amount at the rate of 8.5% per annum from the date of default until payment in full.
11.
PERSONAL PROPERTY SECURITIES ACT
The Borrower acknowledges and agrees that: (a) this Agreement constitutes a security agreement for the purposes of the Personal Property Securities Act 2009 (Cth) ("PPSA"); (b) the Lender may register a financing statement on the Personal Property Securities Register ("PPSR") to perfect the security interest granted under this Agreement; (c) the Borrower waives, to the extent permitted by law, any right to receive a copy of any verification statement or financing statement registered in connection with this Agreement (PPSA s. 157); and (d) to the extent permissible, the Borrower agrees not to register a financing change statement or take any action that could affect the Lender's security interest without the Lender's prior written consent.
12.
EXTENDED HARDSHIP SUPPORT
In addition to any statutory hardship rights, the Lender agrees to consider the following hardship measures upon a written request from the Borrower supported by evidence of hardship: (a) repayment deferral of up to three (3) months (with interest continuing to accrue); (b) extension of the Maturity Date by up to twelve (12) months with revised instalment amounts; (c) capitalisation of arrears into the principal balance; or (d) conversion to interest-only repayments for a period of up to six (6) months. The Lender shall respond to any hardship request within twenty-one (21) days. Any variation arising from a hardship arrangement shall be confirmed in writing and shall not constitute a waiver of the Lender's rights under this Agreement.
13.
ADDITIONAL TERMS
Borrower must provide quarterly management accounts to the Lender within 30 days of each quarter end. Borrower must not create any further encumbrance over the Collateral without the Lender's prior written consent.
14.
GOVERNING LAW AND JURISDICTION
This Agreement is governed by and construed in accordance with the laws of New South Wales and, where applicable, the laws of the Commonwealth of Australia (including, without limitation, the National Consumer Credit Protection Act 2009 (Cth) if this is a regulated credit contract, the Personal Property Securities Act 2009 (Cth) if security has been granted, the Privacy Act 1988 (Cth), and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) where applicable). The parties submit to the non-exclusive jurisdiction of the courts of New South Wales. Nothing in this Agreement prevents either party from commencing proceedings in any court of competent jurisdiction.
15.
GENERAL PROVISIONS
Entire Agreement: This Agreement constitutes the entire agreement between the parties regarding the Loan and supersedes all prior discussions and understandings.
Amendment: No amendment is valid unless in writing and signed by both parties.
Severability: If any provision is unenforceable, the remaining provisions continue in full force.
Waiver: A party's failure to enforce any provision does not constitute a waiver of that right.
Successors and Assigns: This Agreement binds and benefits the parties' heirs, executors, personal representatives, and permitted successors. The Borrower may not assign this Agreement without the Lender's prior written consent.
Electronic Execution: This Agreement may be signed electronically; electronic signatures are valid under the Electronic Transactions Act 1999 (Cth) and State and Territory equivalents.
Amendment: No amendment is valid unless in writing and signed by both parties.
Severability: If any provision is unenforceable, the remaining provisions continue in full force.
Waiver: A party's failure to enforce any provision does not constitute a waiver of that right.
Successors and Assigns: This Agreement binds and benefits the parties' heirs, executors, personal representatives, and permitted successors. The Borrower may not assign this Agreement without the Lender's prior written consent.
Electronic Execution: This Agreement may be signed electronically; electronic signatures are valid under the Electronic Transactions Act 1999 (Cth) and State and Territory equivalents.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.
LENDER
Robert C. Patterson
Date: ____________________
BORROWER
Michael T. Chen
Date: ____________________
GUARANTOR
Jennifer A. Chen
Date: ____________________
Available as a print-ready PDF or an editable Microsoft Word (.docx) file.
What Is a Loan Agreement?
A loan agreement is a legally binding contract between a lender and a borrower setting out the terms of a loan. It specifies the principal amount, interest rate, repayment schedule, any security, the consequences of default, and the events of termination. A written loan agreement is essential for any significant amount and particularly important for loans between related parties, where undocumented "gifts" can create tax and estate issues.
Loans in Australia are governed by the general law of contract, state-based limitation legislation, and — where the loan is a credit contract regulated by the National Consumer Credit Protection Act 2009 (Cth) — a detailed licensing and responsible lending regime administered by ASIC. The NCCP Act applies where credit is provided wholly or predominantly for personal, domestic, or household purposes, to purchase or improve a residential property for residential use, or for a residential investment property.
Private loans between family or friends, and most business-to-business loans, fall outside the NCCP regime. However, the unfair contract terms provisions in Part 2-3 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) can apply to standard form loan contracts with small businesses since 9 November 2023. Well-drafted, balanced terms are essential to enforceability.
What's Covered in This Template
Our loan agreement template covers every essential element of a private or commercial loan.
Party Details
Legal names, ABNs (if any), and addresses of lender and borrower.
Principal Amount
Loan principal in Australian dollars.
Interest Rate
Fixed or variable rate and compounding basis (or interest-free).
Repayment Schedule
Lump sum at maturity, regular instalments, or interest-only with balloon.
Drawdown and Purpose
Date of advance and any restrictions on use of funds.
Security
Unsecured, or secured by PPSR registration over property, a guarantee, or a mortgage.
Events of Default
Missed payments, insolvency, and breach of representations.
Acceleration
Lender's right to demand immediate repayment of the outstanding balance on default.
Prepayment
Right of borrower to repay early, and any prepayment fees.
Representations and Warranties
Standard representations from both parties.
Governing Law
Choice of Australian state law governing the agreement.
Dispute Resolution
Negotiation, mediation, and jurisdiction for any dispute.
How to Create a Loan Agreement
Follow these steps to produce a clear, enforceable loan agreement in minutes.
- 1
Enter Party Details
Provide lender and borrower legal names, ABNs (if any), and addresses.
- 2
Set Loan Terms
Specify the principal, interest rate, and purpose of the loan.
- 3
Configure Repayment
Choose the repayment structure — lump sum, instalments, or interest-only with balloon.
- 4
Add Security and Default Provisions
Specify any security, events of default, and acceleration rights.
- 5
Review and Download
Check governing state, dispute resolution, and signatures, then download the PDF.
Why Doxuno documents are different
Four things that make our templates more thorough than AI-generated drafts and more current than static template libraries.
Always current
Always current with the law
Templates carrying statute references are continuously updated as the law changes. Your document always reflects the current legal framework.
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Free to download. Vector text, embedded fonts, statute citations baked in. Print, sign, file. Ready for any signing flow including electronic signature.
Word · .docx
Editable Word (.docx)
Continue editing in Word after download. Add custom clauses, reuse the template for similar agreements, or share with a colleague for collaborative review.
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Legal Considerations
Loan agreements must navigate consumer credit, tax, and contract-law requirements.
This template is for informational purposes only and does not constitute legal or financial advice. For loans regulated by the NCCP Act or secured by real property, obtain legal advice before executing.
Reviewed for Australian law
NCCP Act and Regulated Credit
The National Consumer Credit Protection Act 2009 (Cth) and the National Credit Code (Schedule 1 to the Act) regulate consumer credit. Regulated lenders must hold an Australian Credit Licence issued by ASIC, comply with responsible lending obligations under sections 128–131, and provide prescribed disclosures. Private, one-off loans between family or friends are typically not regulated — but check the business-lending exception carefully.
Interest and Usury
There is no universal interest cap in Australia, but small amount credit contracts (payday loans) are subject to caps under section 31A of the National Credit Code. State-based consumer protection laws and the unconscionability provisions in section 12CB of the ASIC Act 2001 (Cth) can also apply to manifestly excessive interest. For private loans, a commercial rate (e.g., 5%–10%) is usually safe; very high rates invite challenge.
Security Interests and the PPSR
Where the loan is secured over non-land personal property (for example, a car, business equipment, or shares), registration on the Personal Property Securities Register under the Personal Property Securities Act 2009 (Cth) is essential to perfect the security and preserve priority. Unperfected security is vulnerable on the borrower's insolvency.
Tax Treatment
A genuine loan, with documented terms, repayments, and interest, is generally not treated as a gift or income for tax purposes. Family loans that are undocumented or lack genuine repayment can be recharacterised by the ATO as gifts (affecting Centrelink means testing), income (assessable to the recipient), or Division 7A deemed dividends under the Income Tax Assessment Act 1936 (Cth) where a private company lends to a shareholder.
Frequently Asked Questions
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